Gray Market Goods

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Howard Schwartz of the Connecticut Better Business Bureau talks about “grey market goods,” less expensive products for sale outside of the U.S. While they may seem cheaper, there can be some hidden costs.

Below is a press release from the Connecticut Better Business Bureau on the topic. For more information, visit www.ct.bbb.org.

Consumers looking for deals on brand name products are finding them on online on what is known as the “gray market,” however, Connecticut Better Business Bureau says buyer beware.

Unlike “black market” products that may be controlled, such as prescription medication or firearms, their gray counterparts are defined as items manufactured abroad and imported into the U.S. without permission of the trademark holder.  Manufacturers only authorize gray market merchandise for sale in other countries, typically at lower prices than the same items in the U.S.

In some cases, merchandise is manufactured under different specifications and does not meet US regulatory requirements.  A larger problem for consumers, is that in an effort to stem the unauthorized sale of these items, manufacturers’ warranties do not cover gray market goods.

“Consumers are protected if there is a problem with a product that they buy that is authorized for sale in this country,” according to Connecticut Better Business Bureau President, Paulette Scarpetti.  “The problem with gray market merchandise is that if the product breaks within a typical warranty period or is defective, the cost of repairs or replacement may eliminate any savings.”

Just about every kind of consumer product can be found on the gray market, ranging from clothing and cosmetics, to electronics and automobiles.  Gray market distributors sell through small websites and online auctions.

The business advocacy group Alliance for Gray Market and Counterfeit Abatement warns consumers that “ Gray market resellers may advertise products as new, authentic, and branded goods, but customers may wind up receiving goods ranging from used or  re-marketed products, to those that have been wholly or partially  counterfeited or mislabeled.”

Connecticut Better Business Bureau offers the following tips to avoid problems with gray market merchandise:

Check to see if the price is unrealistically low – While there are good deals to be found online, beware of a brand name product that is being sold at significantly below the manufacturer’s price.   Remember to consider the value of a US warranty and rebates you may be required to forgo.

Ask the seller – Sellers are obliged to disclose whether they are selling a gray market product.  The Connecticut Department of Consumer Protection (www.ct.gov/dcp) requires such disclosure, and that seller is obliged to tell buyers when a product is not covered under a valid US warranty or eligible for any rebate offered by the manufacturer.

Carefully inspect the merchandise – Make sure it is in working order.  Gray market goods may not be factory-fresh, having gone through the hands of several third parties.  Check to see whether the manual and other printed material is in English.

Ask about repairs – Gray market merchandise will most likely not be eligible for repair at a manufacturer’s authorized service center.   Ask where the service will be done and whether repairs will be performed according to the manufacturer’s specifications

Use a credit card – A credit card allows you to dispute charges for a purchase of gray market merchandise that was misrepresented at the time of sale.

You will find additional consumer tips at www.bbb.org.

Founded in 1928, Connecticut BBB is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. BBB helps consumers find and recommend businesses, brands and charities they can trust, offers objective advice and a wide range of education on topics affecting marketplace trust. BBB also offers complaint and dispute resolution support for consumers and businesses. Today, 113 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than three million local and national businesses and charities. For more advice on finding companies and businesses, start your search with trust at http://www.bbb.org.

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